WS Review Spring 2024

How do accounting assets and investing assets differ?

• There is no difference.

• Accounting assets have value, Investing assets do not.

• Investing assets produce a future income stream, accounting assets have value and can be sold, but may or may not produce future income streams.

• Accounting assets use future cash flows, Investing produce future income streams.

Identify a need.

• Least expensive form of transportation to get to and from work.

• BMW X1 sports activity vehicle.

• Newest iPhone and unlimited data plan.

• A television.

How much of your income should you use for savings and paying debt.

• 50%

• 30%

• 20%

• 10%

• 5%

How much of your income should you use for wants.

• 50%

• 40%

• 30%

• 20%

How much of your income should you use for necessities.

• 50%

• 40%

• 30%

• 20%

Keeping 3 - 6 months of your income in a savings account is important to

• Impress your friends when you go out and spend whatever you want.

• Purchase a want when a good deal comes along.

• Use as part of the 50% of necessities in the budget.

• Keep an emergency fund for unexpected expenses to keep your budget in tact.

Income taxes are calculated on which amount?

• Gross Income

• Adjusted Gross Income

• Standard Deduction

• Taxable Income

The highest tax a rate a taxpayer will pay is called the

• Average tax rate.

• Marginal Tax rate.

• Blended tax rate.

• The maximum tax rate.

The difference between the sale price of an assets and the purchase cost of assets when held for longer than 1 year is called a(n)

• Long-term Capital Gain

• Ordinary Gain

• Exchange Gain

• Held Gain

Which type of gain is given preferential tax treatment?

• Long-term Capital Gain

• Short-term Capital Gain

• Ordinary Gain

• Exchange Gain